On May 1, 2016, Meta Computer, Inc., enters into a contract to sell 5,500 units
ID: 2425635 • Letter: O
Question
On May 1, 2016, Meta Computer, Inc., enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Inc., at a fixed price of $94,600, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2016. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $44,000 of purchase. The stand-alone selling price for the Comfort Office Keyboard is $19.20 per unit. How many performance obligations are in this correct? Prepare the journal entry that Meta would record on May 1, 2016. (If no entry is required for transaction/event, select "No journal entry required" in the first account field.)Explanation / Answer
Requirement : 1
Two
(2)
Explaination
one is seeling of keyboards and the second is discount coupon for next six months
Requirement : 2
Journal entry
Working
the seller offers a 25% discount coupon to Bionics for any purchases in the next six months.
, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher
the coupon will be applied to $ 44,000 of purchases.
The stand-alone selling price for the Comfort Office Keyboard is $19.80 per unit.
= $ 44000 x 0.5 ( probability )
= $ 22000
now we will calulate Deffered Revenue- Discount option
=$ 22,000 x 25%
particular No How many performance obligations are in this contract?Two
(2)
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